A RAFT of bad news created fresh fears about the strength of the global economic recovery – triggering a fall of 2.8% for London’s leading shares index.

The FTSE 100 Index fell 158 points to 5544.2 with banks and miners leading the falls, as doubts surrounding last week’s eurozone rescue plan started to sink in amid reports China is reluctant to contribute to the bailout fund.

Stubborn inflation, high unemployment and downgraded forecasts from the Organisation for Economic Co-operation and Development added to the waning optimism.

France’s Cac-40 and Germany’s Dax both dropped more than 3% and the Dow Jones Industrial Average was down 1.5% as the London market closed.

The OECD warned of a “marked slowdown” in eurozone economies next year, with growth to drop to just 0.3% after 1.6% growth this year.

Unemployment in the euro area has also picked up with a rise of 188,000 in September the largest monthly increase for two years and raising the region’s unemployment rate to 10.2%.

Despite today’s falls, London’s blue chip shares index has still risen 8% over October, making it the best monthly performance since July 2009.